Douyin integrates its instant retail business, and Douyin Supermarket is merged into the "Delivery within an Hour" service | Exclusive

Author | Li Xiaoxia

Editors | Qiao Qian, Yang Xuan

36Kr has exclusively learned that Douyin Supermarket will be merged into Douyin Hourly Delivery to improve the efficiency of the instant retail business.

In the first week after the Spring Festival in 2023, Douyin Supermarket was launched within Douyin E-commerce. It is an online self - operated e - commerce business similar to JD Supermarket. At that time, the person in charge reported to Mu Qing, the then vice - president of e - commerce.

Mu Qing once said that Douyin Supermarket was in a very early experimental stage. The original intention of the business was to meet the needs of users' e - commerce shopping experience. For example, the supermarket business could meet the needs of some specific users in terms of platform services and logistics timeliness, and effectively supplement the existing platforms and merchants of Douyin E-commerce.

Before its official launch, Douyin Supermarket went through about a year of preparation. In the middle of 2022, it was piloted in cities such as Guangzhou, Shenzhen, and Hangzhou. That year, Douyin E-commerce was advancing rapidly and clearly set the strategic goal of focusing on shelf e - commerce. It was reported that Douyin Supermarket was expected to penetrate the young and high - income groups in first - and second - tier cities and increase the frequency of users' use of Douyin E-commerce.

To serve Douyin Supermarket, ByteDance also built some self - operated warehouses. However, up to now, in terms of the operation model, Douyin Supermarket does not adopt the full self - operated model like JD Supermarket. Instead, it is more similar to Tmall Supermarket, adopting a mixed operation mode combining consignment sales and self - operation.

Compared with the ordinary e - commerce model, the prominent advantage of online supermarkets lies in timeliness. For example, next - day delivery is the standard for Tmall Supermarket and JD Supermarket, and some categories can even achieve half - day delivery. In contrast, Douyin Supermarket has an obvious gap in fulfillment ability. Many products are delivered in multiple days, and only some products can achieve next - day delivery.

Running parallel to the "distant - field" and "large - warehouse" model of Douyin Supermarket is the "near - field" Douyin Hourly Delivery business. In August 2022, Douyin first tested the hourly delivery business in Shenzhen. In 2023, with the launch of Douyin Supermarket, the hourly delivery service appeared on the Douyin Supermarket interface.

In the second half of 2023, instant retail became a competitive proposition among large enterprises. The importance of Douyin's hourly delivery business increased, and its entrance was promoted to the Douyin Mall, standing side by side with Douyin Supermarket.

Hourly delivery usually refers to the service that allows customers to receive the products they purchased on the platform within one hour. The product categories include fresh produce, daily necessities, digital products, etc.

In the past few years, "hourly delivery" has been a commonly used term for large enterprises to layout instant retail. For example, as early as 2017, Tmall Supermarket's one - hour delivery service was first launched in Beijing. In 2020, the "hourly delivery" service was launched on Taobao. The products come from Tmall Supermarket, supermarkets on Taoxianda, and community supermarkets and convenience stores on Ele.me.

JD launched its hourly delivery service in 2021. In May last year, JD integrated JD Hourly Delivery and JD Daojia and comprehensively upgraded its instant retail business to launch JD Instant Delivery. At the end of April this year, the instant retail business "Hourly Delivery" under Taobao and Tmall was officially upgraded to "Taobao Flash Purchase", which includes the takeaway business.

Zhang Nan, who once served as the CEO of the Douyin Group, envisioned Douyin to become a universal portal for users on mobile devices. On the way to becoming a "universal portal", Douyin has chosen businesses with large expansion space, capable of bringing certain revenue increments, and promoting users to open Douyin frequently.

As for instant retail, which belongs to the high - frequency consumption scenario, Douyin of course doesn't want to miss it.

Douyin Takeaway was once entrusted with this important task. In 2022, Douyin Takeaway, that is, Douyin Group - buying Delivery, was piloted in three cities: Beijing, Shanghai, and Chengdu. It mainly sold high - unit - price group meals with relatively low timeliness requirements, and the delivery services were provided by third - parties such as SF Express and Dada.

However, the delivery capacity has always been a constraint for Douyin in the takeaway business. Therefore, for a long time, Douyin has been trying to make up for this shortcoming. There were even rumors that it planned to negotiate the acquisition of Ele.me, but this was denied by the official. Last year, Douyin Takeaway was adjusted several times. It was briefly divided from Douyin Life Services to Douyin E-commerce and integrated with the hourly delivery service into the home - delivery department. But a few months later, Douyin Takeaway returned to Douyin Life Services.

As the Douyin Takeaway business gradually shrank, instant retail led by hourly delivery returned to the center of focus. After the recruitment and city expansion of the hourly delivery service were suspended for several months last year, they began to speed up, and the number of cities increased from single - digit to more than forty.

Compared with takeaway, the products sold by hourly delivery are more standardized, and the peak demand is relatively gentle. It won't generate a large number of highly concentrated demands within a specific 1 - 2 hours like takeaway. The volatility of the delivery capacity demand is relatively smaller. In addition, the hourly delivery service promises a delivery time of no more than 60 minutes, which gives the delivery system a little more buffer time.

In other words, if Douyin Takeaway wants to grow, it must have its own delivery team, but Douyin Hourly Delivery doesn't have to build its own delivery capacity. In fact, many merchants of Douyin Hourly Delivery choose self - delivery. They mainly value the traffic value of Douyin when they settle in.

However, the timeliness problem faced by Douyin Supermarket is also the current challenge for Douyin Hourly Delivery. While Taobao Flash Purchase and Meituan Flash Purchase can achieve delivery within half an hour, the delivery time of Douyin Hourly Delivery is generally between 30 and 50 minutes.

To weaken the impact of insufficient fulfillment, Douyin's instant retail also launched a next - day delivery service for merchants whose single warehouse can cover the same city and its surrounding areas. However, in the view of industry insiders, instant retail emphasizes "buy now, get now". Strictly speaking, next - day delivery cannot be called instant retail.

But these problems all present a fact, that is, Douyin Supermarket and the hourly delivery service are doing the same thing. Even though they have been separated since they were "born from the same root" at the beginning, they still haven't clearly distinguished their respective differentiated positions. Therefore, it's not hard to understand the merger of the two now.

It's just that this time, the protagonist is Douyin Hourly Delivery. In the current booming instant retail market, the timeliness advantage of online supermarkets is gradually losing its luster. Betting on instant retail seems to be the best option.

After the cultivation of the "Three - Kingdoms War" among Meituan, Taobao, and JD, both merchants and users have a certain understanding and acceptance of instant retail. For Douyin, listing instant retail as a priority at this time may be smoother than before.

(Ren Cairu, an author of 36Kr, also contributed to this article)